Missold GAP Insurance Claims

GAP insurance is an insurance product that is often taken out with a new car loan or new lease agreement. GAP insurance protects the policy holder from incurring extra expenses if their car is "totalled" or "written off".

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There are two main types of GAP Insurance:-

1. GAP Insurance taken out within 3 months of delivery of a new car – this insurance covers the shortfall or "gap" between the insurance settlement and either the original price paid, a new for old replacement or any finance that is outstanding.
2. GAP Insurance bought more than 3 months after delivery or on a vehicle that is over 5 years old – this insurance covers the shortfall or "gap" between the insurance settlement and a Parker's Private Good valuation of the vehicle.

GAP insurance is generally required if you take out a lease agreement because although the car is still owned by the dealership or car manufacturer the lease holder is financially responsible for the vehicle. GAP insurance in these circumstances makes perfect sense because it protects the lease holder from financial loss in the case of an accident and we've all heard about people who have lost out when their vehicle has been written off by an insurance company.

However, GAP insurance is not always required, is not always suitable and can be missold. It may be missold by dealerships who want the extra money or who are ignorant and just automatically add it to the loan or lease agreement without advising the buyer of what it is or asking them if they want it. As a consumer, you have the right to refuse gap insurance and to be given the appropriate advice.

You may not need GAP insurance if:-

-- You have adequate cash reserves to cover the shortfall between the insurance settlement and value of the vehicles, and so do not want to pay insurance premiums
-- You are already covered through your motor insurance
-- The loan agreement covers any gap in value
-- Your vehicle is heavily discounted so there would not be a gap in value

In these circumstances, you would want the option to refuse GAP insurance as it is not relevant to your circumstances. If the GAP insurance is not needed then it can be deemed to have been missold if it was added to your loan, hire purchase or lease agreement.

If you have found that GAP insurance has been added to your agreement without your knowledge, where it is not needed or where it is even invalid, then you may be eligible for claiming a refund of policy premiums paid on this missold GAP insurance policy.

If you believe that you have been missold GAP insurance, you should contact us for advice and we can process your claim from start to finish and get you a refund. You may be owed many thousands of pounds, depending on your policy premiums and the length of time you have been paying, so check today.

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